Looking Beyond Demand Response: Barriers and Opportunities to Deploying Virtual Power Plants among Rural Electric Cooperatives in the United States

Abstract

Rural electric cooperatives (co-ops) find themselves in a unique position regarding deploying virtual power plants. Co-ops, which are consumer-owned utilities, have a vast history of deploying controllable demand-side management technologies that can fit perfectly into a VPP framework, with almost a gigawatt of demand-side management capacity across four generation and transmission cooperatives in Minnesota (G. Chan et al. 2019; Matthew Grimley and Chan 2023). This more than forty-year-long experience deploying controllable resources and their nonprofit, consumer-owned structure makes rural electric cooperatives perfectly positioned to deploy virtual power plants. However, several challenges, such as high upfront costs and uncertainties around market rules, hinder VPP deployment for rural co-ops. Furthermore, the fact that most co-ops comprise a complex network of distribution cooperatives that make up larger generation and transmission (G&T) cooperatives also complicates how VPPs can be deployed by rural coops.